…That’s until its Model S outsold the Mercedes S-Class in the United States last year, showing there’s a market for premium electric cars.

EDWARD TAYLOR, REUTERS SENIOR CORRESPONDENT, FRANKFURT,

“Mercedes doesn’t directly feel threatened by Tesla, but it is worried that as a large company with about 280,000 employees, it can’t really be as agile as smaller start-up firms that have basically 15-20,000 employees. And so it’s thinking about how it can change its own internal processes to become leaner, slimmer, more agile and faster.”

So Mercedes is working at flattening its hierarchies and encouraging innovation.

A hundred managers were sent to Silicon Valley to tour Apple, Google and Uber.

EDWARD TAYLOR, REUTERS SENIOR CORRESPONDENT, FRANKFURT,

“German corporations are very bureaucratic and hierarchical and they have up to six different management layers, each level has to approve significant investments. Silicon Valley companies basically have the entrepreneur and a skeleton crew and these decisions about which tech people should back are taken very quickly.”

Advances in technology are forcing carmakers to constantly upgrade to stay cutting edge.

Daimler and Tesla are vying to dominate the premium electric car market…

Speed – in the decisions as much as the cars – will decide the winner.